Another Season of “Midnight Regulations” Lies Ahead

Right now, all eyes are focused on the election and Congress, with a lot of speculation on what Congress can accomplish – or more likely, what they cannot accomplish – in the remainder of a shortened Presidential election year. It is increasingly difficult to shepherd any legislation of significance through both Republican-controlled chambers to be signed by a Democratic President in the remainder of this year. Even final resolution of must-pass Appropriations bills to fund the government are mired in political squabbles and not likely to be finalized until a post-election lame-duck session. Even prior to this year, President Obama’s Administration has shown a willingness to take on issues more unilaterally using the regulatory or executive action approach rather than to work with Congress on enacting bipartisan legislation. There are a plethora of examples impacting virtually every agency, touching on issues ranging from immigration, health care, environment, transportation, labor, tax policy and many others.

As we approach the end of the Obama Administration, this process is likely to accelerate with the prospects for “midnight regulations” looming in the final months of the Presidential term. There is a long tradition – going back to John Adams – of an outgoing Administration acting at the eleventh hour on key administrative actions. The term “midnight regulations” was coined at the end of President Carter’s term when he rushed through 10,000 pages of new regulations between Election Day and the Reagan inauguration. The Clinton and George W. Bush Administrations were also very active in the final days, with former President George W. Bush’s Chief of Staff Josh Bolton directing agencies to finalize their proposals by November 1 or run the risk of not getting them through. Typically, the period between Election Day and Inauguration of a new President generates 17% more pages of regulations than a comparable period in a non-election year.

The Office of Information and Regulatory Analysis (OIRA) advised all agencies in December of 2015 of the need to complete their highest priority regulations by the summer of 2016 to avoid an end of year scramble that could potentially inhibit final approval. The memorandum may be found here:

In May, OIRA also released their spring semi-annual regulatory agenda, which lists all pending regulations across all agencies and expected actions within the next year. This document is the best window possible into what the administration foresees finalizing in the remainder of this administration. The agenda can be searched by agency and can be found here.

By law, “major” rules ($100M or more in economic impacts) require a 60-day waiting period to allow for congressional review (30 days for minor rules). This means regulations must be published well in advance of the changeover. Given the level of commitment to doing things Administratively rather than through statutory changes, a flurry of regulatory proposals and final actions lies ahead. Businesses, trade associations and other affected entities must review what new regulations are in the pipeline over the remaining eight months and survey tactics to delay or prevent final action of any that would be problematic. This could include engagement with key agency officials, including at OIRA, riders on Appropriations legislation or passage of free-standing legislation, or judicial action in the courts. After the election, affected entities can also plan to approach transition teams about consideration of action on pending or final regulations. A new Administration can take action to immediately rescind rulemaking proposals that are not yet final or begin the much more arduous task of formal rulemaking to reverse or modify rules that have already been finalized.

Gabe leads Prime Policy Group’s energy and environment practice and also assists on client work related to infrastructure and agriculture. His clients have included commercial clients in utilities, oil and gas, chemicals, and automotive as well as trade associations and state and local governments. Gabe’s most recent Capitol Hill experience was as Environmental Counsel on the Republican staff of the House Science Committee and Staff Director of its Energy Subcommittee.